November 28, 2008

Mayoral administration forced to restore £750,000 of £6.5 million cuts in budgets to promote London

Having cut £6.5 million a year from the budgets to promote London abroad in the fields of tourism, inward investment, filming and attraction of foreign students Boris Johnson's administration has now been hit over the head by events and forced to restore £750,000 of these cuts in the area of tourism. The administration, however, is now falsely claiming it is boosting spending to promote London's tourist industry when all it has done is restore part of the damaging cuts it had previously made!

A press release put out by the Mayor's Office last night states: 'The Mayor of London has announced an increase of nearly £750,000 to Visit London campaigns, aimed at stimulating visits to the capital in the build up to Christmas and into 2009.'

Any such increase in spending to promote abroad London is welcome for reasons that have been outlined several times in this blog. The problem is that the £750,000 'increase' follows a £1.5 million a year cut to Visit London's budget made earlier by the same Mayoral administration. So, therefore, far from boosting spending to promote London's tourism industry in fact the budget to promote London's tourism industry has been reduced by £750,000 this year - and the body for the integrated strategic promotion of London, London Unlimited, has been entirely abolished with a budget cut of £5 million a year. Meanwhile, the result of these damaging cuts has been the departure of Visit London's CEO James Bidwell - a highly respected figure in the tourism industry.

The reasons that led Boris Johnson's administration to the new partial, and unacknowledged, U-turn are evident, The press release notes: 'The Mayor made the announcement to an audience of tourism leaders at the Visit London Awards at the Royal Albert Hall and follows a meeting with industry figures this week.' In other words tourism industry leaders informed Boris Johnson that his cuts to Visit London were deeply damaging to London and he had better do something about it - particularly in an economic downturn. This follows the extremely unsubtle hint given by the Tourism Society, the organisation of tourism industry professionals, earlier this year when it decided to award its prestigious prize for services to the tourism industry to... Ken Livingstone.

But the damage done to London's tourism promotion by Boris Johnson's administration still hasn't been undone. In addition to the budget cuts Boris Johnson's administration humiliated Visit London, despite expert opinion in the GLA, by for months refusing even to meet its chief executive - this contemptuous attitude was undoubtedly a further reason for Bidwell's decision to depart.

James Bidwell was the second absolutely top rank of the marketing profession CEO Visit London had attracted. His predecessor, David Campbell, is now head of the O2 which, in addition to his earlier career successes, has become a roaring success as the most visited arena in the world. So far the head hunt for James Bidwell's successor goes on. But it will be extremely difficult to attract anyone of equal talent or standing to the two previous CEO's to an organisation whose budget was slashed, which was humiliated by the Mayor's Office, and whose strategic role, and great value, to London is clearly not understood by the Mayor's Office as shown by the various U turns on the issue. Meanwhile the entire staff of the body responsible for integrated promotion of London, London Unlimited, which set an example which cities such as New York have since followed, have been sacked. In short the damage done by Boris Johnson's administration to tourism and the promotion of London is far from having been undone.

This whole fiasco, however, has important lessons for those who want to reverse the damaging policies of Boris Johnson's administration. The tourism industry did not lie down and pretend to be dead when confronted with policies by the new administration that were deeply damaging to London. Nor did it rely purely on quiet 'insider' lobbying. It mounted a loud and vociferous campaign to reverse policies that were damaging to London and it has gained a first success.

The reason for this is that Boris Johnson's administration is best imagined as a sort of sack of potatoes with a voice. The strategic direction it would like to follow, 'small government', simply won't work because London is undergoing rapid population growth and requires huge investment both to get out of the current economic downturn and prepare itself for competition from other international business centres. Therefore the administration is directionless and not knowing where it is doing - as not merely many of those who interact with it, and innumerable GLA Group officers, who cannot get any sense of direction or even any decisions on many matters out of it, know every day.

The best thing therefore is to go up and hit it with a stick and the resulting cry of pain may get you some money. Try to reason with it quietly and its own lack of direction and incompetence will lead to no result. That is the lesson that others should draw from the fiasco of Boris Johnson's policies around tourism.

Note

For those who want further details the press release contains the following empty claims and revealing facts.

First, it disingenuously states: 'The additional public/private funding will take the total amount spent on promoting the capital at home and abroad to £3.25m over the next four months.' The trouble is that this is actually less, even after restoration of the £750,000, than would have been spent before Visit London's budget was cut by £1.5 million this year by the same Mayoral administration.

Second, it states that this £3.25 million promotion campaign will result in: 'an amount that is expected to deliver £70m in economic benefit to the city'. That is right. Studies show that tourism marketing campaigns result in about £20 of economic benefit to London for every £1 spent - which is why they are such good value for money. And why the cuts that were made were so damaging.